Introduction

The creation of an independent Palestine, side by side with Israel, is broadly supported internationally, formally backed by successive U.S. administrations, and enjoys popular support in Israel, according to polling data. Yet efforts by Palestinian authorities to gain statehood recognition at the UN have generated controversy. Following a failed bid to achieve full UN membership in 2011, Palestinian Authority (PA) President Mahmoud Abbas managed to successfully push through a bid for formal recognition of non-member state status for Palestine at the General Assembly on November 29, 2012.

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The vote comes as peace negotiations with Israel remain stalled and amid a cease-fire between Israeli forces and the Hamas movement, which controls Gaza. Analysts say its new status will bestow the PA with little more than a symbolic victory and could trigger diplomatic and financial retribution from the United States and Israel. The two longstanding allies both oppose the bid on grounds that it would undercut the formal peace process and could incite regional unrest.

Why did Abbas seek non-member state status at the UN?

The decision to seek non-member state status for Palestine—an elevation from its standing as a permanent observer "entity"—follows a failed bid to gain full UN membership in 2011. Palestine was unable to garner enough support in the UN Security Council, and faced the threat of veto from the United States.

In a September 2011 speech, Abbas said he was moved to act by a lack of progress in the peace talks and ongoing Israeli settlement-building in the West Bank and East Jerusalem, which he terms illegal. The Palestinian territories should "be represented in [their] natural borders," Abbas said. The Palestinians seek recognition on the 1967 borders, including Gaza, the West Bank, and East Jerusalem.

Since that speech, peace negotiations with Israel have remained frozen, Jewish settlements in the West Bank have grown, and internal divisions continue to plague the Palestinian Authority, which remains split between the Fatah-controlled West Bank and Hamas-controlled Gaza Strip.

Economic and fiscal conditions (FT) in Palestinian territory have continued to deteriorate. The Palestinian economy is greatly dependent on foreign aid, and many economists, including those at IMF, say that growth requires Israel's easing of security restrictions that encumber the flow of commerce.

In the days leading up to the 2012 General Assembly, the Palestinian leadership revealed it was considering exiting the 1993 Oslo Accords, including the Paris Protocol, which governs economic relations with Israel. The PA claims that Israel has undermined all attempts to revive the peace process. While Israel has supported a resumption of talks without preconditions, the PA has demanded a suspension of Jewish settlement construction before discussions resume.

In his 2012 speech to the General Assembly, Abbas said in the latest bid for enhanced UN recognition, "we do not seek to delegitimize an existing state—that is Israel; but rather to assert the state that must be realized—that is Palestine."

A draft of the UN General Assembly resolution, obtained by the Associated Press, cites the "urgent need for the resumption and acceleration of negotiations within the Middle East peace process" for "a just, lasting and comprehensive peace settlement" that resolves all outstanding core issues, particularly the Palestine refugees, Jerusalem, settlements, borders, security and water.

What is the UN process for granting non-member state status?

An applicant state needs to obtain a simple majority vote of the 193 members in the General Assembly to win non-member state standing. Unlike a proposal for full UN membership, the Security Council—and the threat of veto—is absent from the process. On November 29, the UN passed a vote to recognize Palestine as a non-member observer state. The vote passed 138 to 9 with 41 abstentions.

What is the Palestinian history at the UN?

The Palestinian Liberation Order won observer status in 1974, a position which is not formally provided for in the UN Charter, but relies entirely on precedent. As such, the rights and privileges of observers vary case by case. Varieties of UN observers include "entities" (like Palestine), intergovernmental organizations, national liberation movements, and non-member states—the status pursued by the PA, and currently only held by the Vatican.

As an observer, the PLO was invited to participate in General Assembly sessions and conferences of other UN bodies. In 1988, the designation of "Palestine" officially replaced the "Palestinian Liberation Order" within the UN system. In 1998, the General Assembly extended Palestine privileges that had previously been exclusive to member states, including the right to participate in the general debate at the beginning of each General Assembly, and the right to cosponsor resolutions. According to the UN, the decision "upgraded Palestine's representation at the UN to a unique and unprecedented level, somewhere in between the other observers, on the one hand, and Member States on the other."

What countries support Palestinian statehood?

More than 120 countries diplomatically recognize Palestinian statehood (as declared by the PLO in 1988), a bloc that would seem to ensure a successful vote at the General Assembly, if and when this occurs. However, these numbers may be overly optimistic, writes Yezid Sayigh for al-Monitor, as "much depends on the European position." Unlike 2011, when the EU promised to support Palestine in a non-member state bid, Palestinian officials say some European nations have come out strongly opposed to the campaign in 2012, perhaps as a gesture to Washington. However, in the end, many EU countries broke with the White House and voted in favor of the motion.

What countries oppose this effort?

In addition to Israel, the United States has been a leading opponent of the Palestinian statehood bid at the UN. In a speech in May 2011, President Barack Obama affirmed support for a two-state solution based on 1967 borders, but U.S. officialsobject to the UN bid as premature and damaging to the negotiating process. Direct peace negotiations between Israel and the PA collapsed in September 2010 when Israeli Prime Minister Benjamin Netanyahu declined to extend a moratorium on the expansion of Jewish settlements in the West Bank.

President Obama reiterated the U.S. stance in his address to the UN General Assembly in September 2011: "One year ago, I stood at this podium and I called for an independent Palestine. I believed then, and I believe now, that the Palestinian people deserve a state of their own. But what I also said is that a genuine peace can only be realized between the Israelis and the Palestinians themselves."

Days ahead of the vote in November 2012, State Department spokeswoman Victoria Nuland said Washington viewed the Palestinian bid at the UN as a mistake and would oppose the move. "We do not think that this step is going to bring the Palestinian people any closer to a state," she told reporters.

Are Palestinians united behind this effort?

The PA is the official governing body of the Palestinian people, led by the Fatah faction. Officials in the militant Hamas group, which ousted Fatah forces to take control of the Gaza Strip in 2007, initially rejected the PA's initiative as a unilateral measure. They did not support the move since it would concede parts of "historic Palestine" and "infringe" upon the right of return for the hundreds of thousands of Palestinian refugees. But days ahead of the November 2012 UN vote, senior Hamas officials said they welcomed the move by Abbas (TheNational). Yet one top official, Izzat Al Rishq, emphasized Palestinians' claims over the occupied territories as well as Israel.

How would a UN vote affirming non-member state status affect life inside Palestine?

Very little, in terms of tangible changes resulting directly from the UN decision. Statehood would be a symbolic victory for the PA, but it would lack any formal recognition of sovereignty, borders, and other such considerations normally attendant with state status. Acquiring these things from Israel would require direct negotiations even if the General Assembly endorsed non-member statehood.

Unintended consequences of UN recognition could include heightened tensions and possibly violence in the Palestinian territories. Any cut to foreign aid, on which the PA is heavily dependent, would exacerbate the fiscal crisis in Palestinian territories. In past years, the U.S. Congress has sent strong signals (NationalJournal) that hundreds of millions of dollars in U.S. aid, which has helped prop up institution building and security forces, could be curtailed. In October 2011, the United Nations Educational, Scientific, and Cultural Organization (UNESCO) voted to recognize Palestine as a full member, causing the United States to withdraw roughly $60 million in financial support for the organization.

Washington has donated more than $4 billion in aid to the Palestinians since the mid-1990's in order to combat terrorism, promote stability and prosperity, and meet humanitarian needs. The Obama administration has requested roughly $440 million in aid for FY2013, according to the Congressional Research Service.

How would elevated Palestinian statehood affect the Israeli-Palestinian peace process?

UN recognition of Palestine based on pre-1967 borders may further legitimize the Palestinian cause and help marshal greater support from the international community. But it would also likely ratchet up tensions between the two sides.In response to the bid, Israel could delay the transfer of tax revenues to the PA for several months, as it has done before, and could increase restrictions on the movement of Palestinians within the West Bank, further impeding economic (and social) activity. U.S. diplomats fear such actions could precipitate violence and a cessation of security cooperation between Israel and the PA. Such a scenario could lead to a collapse of the PA and throw the stewardship of the West Bank into Israeli hands.

There is also concern in Israel that non-member state status would empower Palestinian officials to seek recourse at the International Criminal Court. In theory, Palestinians could use the forum in order to bring action against Israel for what they view as violations of international law regarding their treatment in the West Bank and Gaza, including war crimes and the construction of Jewish settlements. In turn, Israel could ask for the prosecution of the Palestinian side over rockets fired from Gaza.

Punitive sanctions from Israel could also jeopardize its long-standing peace with Egypt, where a fragile transitional government struggles to maintain security.

What's at stake for the United States?

The U.S. opposition to the PA's renewed bid could alienate the Arab and Islamic world on an issue of central political significance and at a time of great political upheaval. The opposition could isolate Washington, exposing it to criticisms of hypocrisy (e.g., supporting a rebellion in Libya and Egypt, but opposing the self-determination of Palestinians) and impair its ability to mediate the Israeli-Palestinian peace and cultivate alliances with nascent Arab democracies.

CFR's Robert Danin says this is likely a "Pyrrhic victory" with greater U.S. reluctance to engage the Palestinians as a partner in a renewed peace process.

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